How Meal Delivery Kits Are Part of the Sugar-Rush Economy

By Dan AmossPosted April 1, 2020

Like sugar for humans, bubble-driven economies build up a tolerance for ever-higher doses of money and credit. Once economies fall into addiction, the long-term consequences are tragic: either a deflationary collapse or hyperinflation. An alternative path might be a policy that proactively weans the system from addiction, but such a policy is politically impossible. That’s why many companies today are part of the sugar-rush economy.

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Jim Rickards’ Crash Speculator

Dan Amoss

Dan Amoss, CFA, tracks aggressive accounting and other red flags that markets miss. He’s a student of the Austrian School of economics and Daily Reckoning fan since 2000. Agora Financial relies on Dan for macro market commentary as well as profitable plays like his 2008 call to readers to buy Lehman Bros. puts, which...

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Treasury Market Indicator Signals Trouble for Stocks

By Dan AmossPosted February 5, 2020

One of the most powerful indicators of a recession looming is a yield curve inversion. As the yield curve continues to slope downward, the Fed will likely react by cutting short-term rates. This could bring another rise in stocks due to speculation, but deteriorating credit conditions could stall another rally.

American Airlines Is a Recession Away From Bankruptcy

By Dan AmossPosted July 10, 2019

Airline stocks appear to be morphing from solid investments into value traps. In particular, American Airline bulls assume the business is not as cyclical as it used to be, thanks to a more consolidated industry. But we already have plenty of evidence that the airline profit cycle is a few years past its peak and a recession will push American into financial distress.

A Shocking Example of Investor Complacency That Ended Badly

By Dan AmossPosted October 16, 2019

After a decade of pro-shareholder decisions from governments and regulators, political winds are shifting. Today, shareholders of distressed companies are feeling the pain of overvalued stocks that find themselves in legal jeopardy. There are many overvalued stocks in which investors are ignoring significant risks and should guard against complacency at their own peril.

Airlines Need Much More Capital

By Dan AmossPosted April 29, 2020

One sector of the market suffering heavy losses is the airline industry. When taxpayer-funded payroll assistance ends, airlines must tap new sources of capital from the private sector. The longer that demand for airline travel remains far below its peak, the more cash airlines will burn and the more capital it will need. The result will be a heavy cost to shareholders.

Hotel Supply Glut Hampers Hilton Recovery

By Dan AmossPosted July 22, 2020

As we analyze the fallout of the economic shutdown, it is clear people are avoiding high-density locations including hotels, resorts and theme parks. With travel increasingly difficult due to cutbacks in transportation options and quarantines, hotels like Hilton are facing a multi-year drought in demand, pricing power, and earnings which will hamper their recovery.

Investors Can’t Ignore Balance Sheets Forever

By Dan AmossPosted June 10, 2020

As economies reopen, revenues bounce and jobs return, many deferred payments will become due as well. Investors will soon recognize the risks of owning shares in companies that have borrowed heavily to tide themselves over. The debt burdens at companies with weak earnings fundamentals tend to squash shareholders over time. So investors should be wary of any uptick in risk aversion that could cause a stock to crash very quickly.